Large and Small Contractors Should Review Upcoming Final Rule from SBA

Final Rule Revises Many Small Business Administration Regulations

The Small Business Administration (“SBA”) has released a final rule revising many small business size and contracting program regulations found in 13 C.F.R. Parts 121, 124-127, effective on June 30, 2016. The revisions, which implement reforms required by the FY2013 National Defense Authorization Act, include the following:

Consequences of Noncompliance with Subcontracting Plans

Under the final rule, a contractor that fails to provide a written corrective action plan after receiving a marginal or unsatisfactory rating for its subcontracting plan performance, or that fails to make a good faith effort to comply with its subcontracting plan, is in material breach of the contract and will have such failure considered in any past performance evaluation. (We have discussed in previous posts similar measures by the FAR Council.) If there is “reasonable basis to believe” that a prime contractor or subcontractor “may have made” a false statement with respect to a subcontracting plan to an employee or representative of the Federal Government or the prime contractor, the matter must be reported to the SBA Office of Inspector General. Any other concern as to whether a prime contractor or subcontractor “has complied with SBA regulations or otherwise acted in bad faith” may be reported to the appropriate SBA Area Office. READ MORE….